OEM/ODM

Many suppliers on Alibaba.com, and other supplier directories, claim to offer Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM) products. In this article, we explain what OEM and ODM mean in the context of manufacturing in China, and other Asian countries.

Whether you decide to get an OEM or ODM product manufactured impacts the entire process, from supplier sourcing and RFQ to product samples and manufacturing.

Definition of Original Equipment Manufacturing (OEM)

An OEM product is made according to the buyer’s product specification. For example, any product with a customized design, material, dimensions, functionality, or even colors can be classified as OEM.

Product specification examples

• CAD files
• Design drawings
• Bill of materials
• Nail gun
• Color chart
• Size chart

Modification examples

• Colors
• Materials
• Coatings

However, you’ll enter “OEM territory” if you attempt to change the design or dimensions of an ODM product.

Preparation

OEM service’ refers to the supplier’s ability and willingness to make products according to the buyer’s design. That said, basically, every supplier in Alibaba and Globalsources.com can make OEM products. In fact, that’s what they are accustomed to.

Hence, you don’t need to go out of your way to search for suppliers that actually state that they offer OEM products, as it can be taken for granted.

On the other hand, finding suppliers that offer ‘real’ ODM products can be much more of a challenge, as explained in this article. Some suppliers even reject quotation requests based on ODM products as they only work with OEM buyers.

It’s easy to get mistaken by product listings in various supplier directories and assume that the suppliers actually ‘have’ all the listed products. It’s actually not that uncommon for suppliers to list products that they have never even manufactured.

• These designs (and the tooling) may be owned by existing customers. The product is only shown to demonstrate what they have made in the past, but the supplier may not have a fixed spec sheet or even the design drawings for the product.
• Some suppliers upload images of products that they never actually manufactured. Hence, the buyer must pay for the tooling, in which case it is questionable if the product can even be classified as an ODM product at all.
• Some suppliers invest in product R&D and tooling, but this is only a small part of all listed products on the major supplier directories. If you go down this route, keep in mind that the supplier will have a lot of leverage as the product is their IP.

Are ODM products off-shelf or stock products?

ODM products are not necessarily products that are available to order directly from their existing warehouse. In most cases, ODM products only exist on paper – for example, product photos, renderings, or drawings. The supplier must still enter production before they can ship products – which normally takes at least 30 to 40 days.

As such, all off-shelf products are ODM products – but not all ODM products are available off-shelf.